National leader Bill English says he is disturbed a burst fuel pipeline has disrupted people's travel plans but he remains confident the situation will be rectified as soon as possible.
Air New Zealand warned five years ago in a submission that a hit to the Marsden Point to Wiri pipeline could be a weak link, voicing concerns about the security of aviation fuel supply.
Today it expressed "extreme disappointment" at the failure of the pipeline which came to light over the weekend.
In a submission to a government review of New Zealand's oil security in 2012, the airline said a material disruption would result in a serious situation with implications for the aviation industry operating to and from this country and to the economy.
Pipeline owner Refining NZ has assessed the material impact on its revenue will be in the order of $10 million to $15m.
It could be next week before the leak, near the Marsden Point Oil Refinery, is repaired.
In its submission Air New Zealand said the volume of fuel that could be stored near the airport needed to be reviewed.
"Storage capacity for jet fuel is modest by international standards. The volume of refined products at Wiri needs to be reconsidered in terms of an acceptable level of storage."
In 2012 about 1.1 billion litres of aviation fuel a year was used at Auckland Airport and since then flying has increased substantially.
Air New Zealand warned that a global supply shock would be understood and accepted by the travelling public.
"They will not however uncritically accept a fuel supply shock that occurs solely within New Zealand," said the submission signed by chief financial officer Rob McDonald.
"Improvements to fuel security should be focused on addressing the ability of local infrastructure to respond to supply shocks."
The submission said package tourism depended on certainty.
"If a country's fuel security reputation suffers through fuel outages which significantly affect flights over a period of time, it will receive international publicity and it will cause some agents to recommend other destinations."
In its latest update today the airline said about 2000 of its passengers would be affected by flight cancellations. All 28 airlines that use Auckland Airport are affected as the pipeline shutdown meant only 30 per cent of usual fuel supply was available.
In addition to the cancellations, some long-haul services to and from Asia and North America will undertake refuelling stops at selected Pacific or Australian airports. To date, three North America services have refuelled in Nadi, Fiji. Today, flight NZ99 from Auckland to Narita, Tokyo will make a refuelling stop in Brisbane.
The airline is also ensuring domestic jet services uplift maximum fuel limits when operating out of Wellington or Christchurch to limit refuelling in Auckland.
Air New Zealand chief operations integrity and standards officer Captain David Morgan today said the refuelling stops completed overnight went well and the practice will continue to alleviate pressure on fuel supplies in Auckland.
"Aviation is a critical transport industry and the lifeblood for tourism and we are naturally extremely disappointed with this infrastructure failure," Morgan said.
Damage seen to a fuel pipeline running from the Marsden Point refinery near Whangarei . Photo / Supplied
Based on information available at this stage, Air New Zealand believes the fuel supply issue was unlikely to have a material impact on its result for the current financial year.
Prime Minister Bill English said on the Newstalk ZB leader's breakfast today he was disturbed a burst pipeline had disrupted peoples' travel plans but was confident that the situation would be rectified as soon as possible.
He said the cost of building a duplicate pipeline would have had to be passed on to consumers and had not been done.
He said another option was to increase storage at the airport so there were greater reserves.
The line is one of New Zealand's longest product pipelines and transports about 40 per cent of New Zealand's fuel demand, 2.26 million tonnes per annum, of finished product to Auckland.
Construction of the pipeline began in 1983 and it was made operational in 1986 by pipeline owner and operator Refining NZ.
